Union Budget 2025: Sitharaman cuts fiscal deficit to 4.4% of GDP

Finance Minister Nirmala Sitharaman on Saturday presented the Budget 2025-26 in Parliament, emphasising employment-led growth through targeted investments in the agriculture and rural sector, MSMEs, and exports. While promoting economic expansion, the government remains committed to fiscal consolidation, ensuring economic stability.
Sitharaman outlined a continued reduction in the fiscal deficit, targeting 4.4 per cent of GDP in 2025-26, down from 4.8 per cent in 2024-25. She reaffirmed her commitment to keeping government debt on a downward trajectory as a percentage of GDP.
"In the July Budget, I committed to staying the course for fiscal consolidation... Our endeavour will be to keep the fiscal deficit each year such that the Central government debt remains on a declining path," she stated.
The budget’s net market borrowing has been set at Rs 11.54 lakh crore, with additional funds coming from small savings schemes. Meanwhile, the gross borrowing target for FY26 has been revised upward by 5.7 per cent to Rs 14.82 lakh crore, compared to Rs 14.01 lakh crore in FY25.
Revenue and expenditure outlook
For 2025-26, Sitharaman projected total government receipts (excluding borrowings) at Rs 34.96 lakh crore, while total expenditure is estimated at Rs 50.65 lakh crore. The government anticipates net tax receipts of Rs 28.37 lakh crore.
"Coming to 2025-26, the total receipts other than borrowings and the total expenditure are estimated at Rs 34.96 lakh crore and Rs 50.65 lakh crore, respectively. The net tax receipts are estimated at Rs 28.37 lakh crore. The fiscal deficit is estimated to be 4.4 per cent of GDP," she said.
The gross tax revenue for FY'25 is expected to reach Rs 38.40 lakh crore, reflecting an 11.72 per cent growth from FY'24. This includes:

With a focus on employment generation, rural development, and industrial growth, the Budget 2025-26 aims to strike a balance between economic expansion and fiscal prudence, ensuring long-term stability and sustainability.